Pakistan examines Chinese proposal to replace dollar with yuan

ISLAMABAD, Pakistan -- Officials in Pakistan say a Chinese proposal to replace the U.S. dollar with yuan for bilateral trade is under consideration.

Beijing has already committed to investing around $60 billion in the country by 2030 under a long-term plan of development cooperation with Islamabad, known as the China Pakistan Economic Corridor, or CPEC.

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Bilateral trade between the two countries stood at around $14 billion in 2015 to 2016. Officials anticipate the trade volume is likely to increase significantly under ongoing CPEC cooperation.

Pakistan Interior Minister Ahsan Iqbal, who has also been overseeing CPEC implementation, revealed this week China is seeking bilateral trade in its own currency, known as renminbi, RMB, or yuan.

"We are examining the use of RMB instead of the U.S. dollar for trade between the two countries," Iqbal said, adding that the use of Chinese currency would benefit Pakistan. But he went on to explain that the Pakistani currency would be used domestically.

The State Bank of Pakistan has already declared yuan as an approved foreign exchange for all purposes in the country. ...